You asked for a discussion of the law on competition in the local telecommunications market and the status of the market.

TELECOMMUNICATIONS COMPETITION

Connecticut passed legislation in 1994 opening the telecommunications market, including the market for local services, to competition. The law (CGS § 16-247a et seq. ) was substantially amended in 1996 and 1999, in part to respond to concerns that competition in the local market was not developing rapidly enough.

The law requires the state's two telephone companies (SBC/SNET and Verizon, which serves most of Greenwich) to provide their competitors with nondiscriminatory access to their facilities. The Department of Public Utility Control (DPUC) regulates the rates that the companies can charge their competitors for access to facilities and services that are not competitive. Services that DPUC has determined to be competitive, such as long-distance service, are not subject to rate regulation. OLR memo 2002-R-0043 describes the law in greater detail.

By law, a company must obtain a certificate of public convenience and necessity from the DPUC to provide local or long-distance service. Currently, 141 companies are certified to provide local service, according to Peter Pescosolido, head of DPUC's telecommunications unit, and more than 300 are certified to provide long-distance service. In most cases, the companies sell local services over facilities leased from SBC/SNET, however a number of companies have built their own networks. In addition, several cable TV companies, notably Cox Communications, provide telephone services over their facilities. The number of companies on the local market has been relatively stable in recent years.

As of June 2002, competitors to SBC/SNET and Verizon provided local service to approximately 15% of the telephone lines in the state. Specific market share information for the business and residential segments of this market is considered proprietary. However, it appears that the market for business customers is substantially more competitive than the market for residential customers. It also appears that the competitors' share of the total market has increased since January, although specific data are not available. In addition, a growing number of individuals have replaced their traditional telephones with cell phones. Wireless service is subject to robust competition.

Since the law was enacted, significant changes have occurred in the telecommunications market and the regulations governing it. In light of these changes, DPUC began an investigation (docket 02-04-22) in April 2002 on the transition of the market to competition. As part of this investigation, DPUC is reexamining its regulatory framework to ensure that its policies do not inhibit the transition to competition. Pescosolido anticipates that DPUC will complete its investigation later this year. Further information about the investigation is available at DPUC's Website, http: //www. state. ct. us/dpuc.

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